Blockchain technology has caught the eye of many banks and industries, with many of them starting to experiment with Bitcoin, Ethereum, Ripple and other cryptocurrencies and Blockchain based technologies. Bitcoin has certainly been giving traditional Digital Payment Systems a run for their money, being one of the fastest and cheapest ways of transferring money globally, while maintaining a certain level of privacy.
Coinbase teams up with Paypal
Paypal has recently partnered up with the well-known cryptocurrency exchange/wallet Coinbase in order to allow fiat currency withdrawals directly to your paypal account, meaning that one will be able to transfer Bitcoins to Coibase, sell them and instantly withdraw a fiat currency directly to your Paypal account.
Due to its reversible nature, Paypal will not yet be available as a method of buying Bitcoin outside of Peer-to-peer markets like LocalBitcoins. Since users can take advantage of the Chargeback/refund system to acquire BTC with hacked/stolen Paypal accounts, which can be easily bought in any Deep Web Market. If done right, a user could successfully take advantage of this system to withdrawal Bitcoin from a stolen Paypal account in a completely anonymous way.
Paypal vs Bitcoin
Paypal is faster than Bitcoin, that’s for sure, since a BTC transfer can take serveral minutes or hours, depending on the fee you choose to pay and Paypal is almost instant, but that seems to be the only aspect in Paypal that is superior to Bitcoin, or is it? At first glance, when considering the >3,4% fees Paypal imposes compared to Bitcoin’s virtually inexistent fees and the amount of personal information one must divulge to Paypal, it may seem like it. But Paypal offers a service that Bitcoin does not: Seller/Buyer Protection
Bitcoin transactions are final, which can be seen as an advantage or as the exact opposite. Many Digital goods vendors struggle to turn a profit when using Paypal as a payment system, since Paypal does not offer Seller Protection for Digital good. Individuals can take advantage of this fact to start a Chargeback/refund dispute, which can leave the Seller empty handed. A recent update in the Paypal Terms and Conditions has also removed Buyer Porection for Digital Goods but malicious individuals can still take advantage of the “Unauthorized payment” refund system.
Paypal’s Seller/Buyer protection works best when related to Physical Goods, since proof of delivery can be presented in case of a dispute. When buying a physical good with Bitcoin it is also possible to use an Escrow service that, for a certain fee, acts as the mediator in case of a dispute. This system can be inferior to Paypal, since it would not cover an unauthorized transaction.
Buying Bitcoin with Paypal
It is possible to buy Bitcoin with Paypal balance, though “unofficial” methods. Peer-to-peer exchange markets allow users to sell or buy Bitcoin amongst themselves through various traditional and alternative payment methods, such as SEPA transfers, Western Union, Paypal and many more. Sellers charge a premium for their bitcoin, however, to make up for their effort and risk. You can use markets like Localbitcoins or Paxful to buy Biitcoin with Paypal, but the high fee charged by your peers (Sellers) in some of the riskier or less popular payment systems may leave you wondering why you went there in the first place, when you can just use your Coincheck account.